ZapMe! Corp. –

SAN RAMON, Calif. – ZapMe! Corp., a company that provides satellite-based Internet access to schools, held an initial public offering October 20, selling 9 million shares at $11 apiece, in the middle of its $10 to $12 pricing range.

Merrill Lynch & Co., Deutsche Bank Alex. Brown, Thomas Weisel Partners L.L.C. and Wit Capital Corp. underwrote the offering.

QuestMark Partners L.P., Dell Computer Corp., and Sylvan Learning Systems Inc. were venture backers. There were no selling shareholders.

ZapMe! provides free satellite-based Internet access and PC installation to schools, grades K through 12, as well as posts banner ads and monitors students’ surfing habits to sell to advertisers. The service includes e-mail and Internet access to 10,000 Web sites. ZapMe! software combines a browser with such applications as Microsoft Word and Excel.

The company expects the $96.1 million in proceeds from the IPO to be used for general corporate purposes, including the expansion of sales and marketing, and product and technology development.

ZapMe! has never been profitable, losing $1.1 million in the six months ended June 30, 1998 and $9.1 million in the six months ended June 30, 1999.

Douglas Becker, president and co-chief executive officer at Sylvan Learning Systems, joined the company’s board of directors in April. Tom Hitchner, a general partner at Quest Mark followed in May.

Compiled by Alissa Leibowitz and Andrei Postnelicu

ZapMe! – Selected Financial

(in thousands, except per share data)

June 25, 1997 (inception) Year Ended Six Months Ended June 30

to December 31, 1997 December 31, 1998 1998* 1999*

Total revenue 147

Net loss -581 -5,013 -1,063 -9,067

Net loss per share -0.05 -0.48 -0.09 -0.95